Top Five Tips for a Financially Fit Business
1. Know your Numbers
It is busy running your ownbusiness and as a small business owner you often find yourselves too busy to dothings like financial recording. But this is the first step in creating a financiallysuccessful business. Invest the time in knowing and recording your monthlysales, cost of goods sold, employee wages and other important incomes andexpenses. This will allow you to be able to understand what is working and willallow you to quickly make positive changes when you see that things getting offtrack. Keeping a record of your numbers also allows you to pin-pointun-necessary and overspending.
2. Eliminate Non-essential Spending
A fast and easy ways to keep more of your money is to record your monthlyspending for 2-3 months (use a cash flow sheet to help with this), then assesseach line item to determine if the expense is too high, can be cut, or isessential to your business. Create an action plan to find ways to lower oreliminate the costs identified as ‘needing attention’.
3. Create a Solid Pricing Strategy
The only way your company will turn a profit is if you price yourproducts or services appropriately. You need to fully understand your material,labour and overhead costs and incorporate them into the price of each productor services along with an appropriate mark-up percentage. This will ensure youare not losing money on any of your product/services and allows you to see yourprice at Cost, Wholesale and Retail to help you make good business decision andpartnership as you grow.
4. Boost Your Sales
As a small business owner, you have big ideas for your business, now isthe time to act on them. First, take a good look at your current products /inventory (use your POS system), now get rid of items that do not sell (sellthem off and stop carrying them)! This can be hard as we sometime areemotionally attached to the things we sell or services we offer… but this isbusiness. Second, offer more of what is selling, or offer similar, complimentaryitems to your hot sellers. And third, discover new forms of distributing yourproducts or services. If you are a brick and mortar think online sales, if youoffer services consider home visits or an online course. There are tons of waysto grow how your customers purchase your product/service, try asking them whatthey want in a fun social media campaign.
5. Make a Plan
Theonly way to achieve success is to plan for it. Take the time to create anaction plan for your business. This will not only give you and your businessdirection it will help you better delegate tasks, reach sales goals and createa brand people know, like and trust, in turn purchasing from you more often.Brace yourself… this will take time, but it is the only way to ensure yourcompany will make money.